Inflation surged to a 14-month high in June as rising prices at the fuel pumps and shallower discounting by fashion retailers intensified pressure on households.

Consumer Prices Index (CPI) inflation rose to 2.9 per cent last month, from 2.7 per cent in May, the Office for National Statistics (ONS) said.

It is the highest level since April 2012, although inflation was prevented from climbing higher by falls in the prices of fruit, vegetables, bread, air fares and package holidays.

The figure was weaker than economists' forecasts of a 3 per cent level, and is expected to fall later in the year as commodity prices ease.

While inflation has remained stubbornly above the Bank of England's 2 per cent target since late 2009, shallower price rises will give the Bank more scope to resume economic stimulus through quantitative easing (QE).

Economists said the figure will come as a relief to new Bank governor Mark Carney, avoiding the need for him to write a letter to Chancellor George Osborne explaining high inflation.

The ONS said clothing and footwear prices fell 1.9 per cent month on month, much less than the 4.2 per cent fall a year ago, as retailers started their summer sales with less generous discounts.

Pressure on motorists increased, with petrol and diesel prices both rising by 1.1p per litre, compared with price falls a year earlier.

The figures showed inflation continues to erode consumers' spending power and significantly outstrip wage rises, which increased by just 1.3 per cent in the three months to April compared with a year earlier.

Price rises for personal care items such as moisturiser and deodorant, and increases in the cost of domestic heating fuel, helped drive inflation higher.

But there were falls in the cost of potatoes, fruit, bread, cereals and dairy products, defying economists' expectations of price rises.

Air fares and package holidays also fell in June, compared with sharp increases in flight costs in May.

Price falls for sofa beds, carpets and settees also helped hold back inflation.

A Treasury spokesman said inflation is down significantly from its peak of 5.2 per cent in 2011.

He added: "At the same time, to help families with the cost of living, the Government has increased the tax-free personal allowance to £10,000, which will take 2.4 million people out of income tax altogether and save a typical basic rate taxpayer almost £600, and frozen fuel duty, which has kept petrol prices 13p per litre lower than they would otherwise have been."

Today's figures from the ONS also showed that Retail Prices Index (RPI) inflation, which includes housing costs, rose to 3.3 per cent in June from 3.1 per cent in May.

Recently-launched experimental measures of inflation - CPIH, including housing costs, and RPIJ, which was created to iron out the gap formed by the different methods of calculating the price of goods - both stood at 2.7 per cent in June.

Commenting
on today’s inflation figures, John Ashcroft, chief economist at
Greater Manchester Chamber of Commerce, said: “Rising
oil prices will continue to place pressure on domestic inflation, as
will a weaker currency, and there is little real evidence that a
devalued Sterling is helping to rebalance the country’s economy
toward exports.

"Whilst there may yet be a weakening of inflationary
pressure in October when higher education fees fall out of the annual
comparison, with even the Bank acknowledging that the target will not
be met within this parliament, is it time to increase base rates?

"The
Bank of England may express concern about the impact an increase in
base rates may have on households, particularly those with high debt
repayments, but with inflation rising ahead of earnings, real
household incomes are already under severe pressure.

“Mark
Carney faces a real policy dilemma, slow growth and rising inflation.
It may well be time to leave the world ofPlanet ZIRP (zero
interest rate policy) and begin to increase base rates.”

Our newspapers include the flagship Manchester Evening News - Britain's largest circulating
regional daily with up to 130,485 copies - as well as 20 local weekly titles across Greater
Manchester, Cheshire and Lancashire.

Free morning newspaper, The Metro, published every weekday, is also part of our portfolio,
delivering more than 200,000 readers in Greater Manchester.

Greater Manchester Business Week is the region’s number one provider of business news andfeatures, targeting a bespoke business audience with 12,687 copies every Thursday.

Every month, M.E.N. Media’s print products reach 2.2 million adults, spanning from Accrington
in the north to Macclesfield in the south.